SOA Releases First Large Claims Study

November 21, 1996

SCHAUMBURG, Ill. -- The first detailed look at a large universe of catastrophic claims in the health insurance industry has been issued by the Society of Actuaries. The 307-page study, Group Medical Insurance Large Claims Data Base Collection and Analysis, has become the Society's most-requested item in recent history.

Results of the four-year project show:

More men than women were high-cost claimants. The preponderance of males (52%) may be surprising to many in light of the well-documented fact that women spend more dollars on health care than men do until about age 50.

Most claimants were between 30 and 64 years old. Among the large claims studied, the 50-59 age group accounted for the highest percentage of claims (22%) and of total charges (21%).

The highest charges per claimant, $92,264, were for newborns. Those for the over-75 age group were the second highest, with $61,423.

For females, the largest proportion of claims and charges were for malignant neoplasms (18%) and circulatory system disorders (14%). Among males, circulatory system disorders ranked the highest (29%). But the highest average charges for both females and males across all age groups were for congenital disorders and perinatal conditions, including prematurity, with claims of $80,000 per case each year.

The Society released this ground-breaking report in September. It is the first of its type that is available to a general audience. Those finding its information useful are reinsurers of group health plans and public officials and professionals involved in public policy decisions on health care.

A total of $10 billion in claims and records of more than 171,000 claimants form the basis of Large Claims. The research project's goal was to create and describe a data base of claims, usually related to catastrophic illnesses, of $25,000 or higher.

"We initiated this study because there was a lack of information on a multi-insurer basis," said Sam Gutterman, immediate past president of the Society and a member of its Board of Governors. "The need for such information will become greater as concern about the cost and quality of U.S. health care delivery grows."

The Large Claims study used information from 1991 and 1992 from a total of 26 insurers. The 171,000 claims studied came from a base of nearly 3 million insureds for each of the two years, a total of 6 million. The project was conducted by Kyle L. Grazier, Ph.D., of Cornell University and sponsored by the Society's Committee on Health Benefits Systems Research and the Society's Health Section.

"We intend for this study to serve as a beginning, not an end," said Anthony Houghton, the Society member who headed the project's oversight group at the analysis stage. "This study and future projects can provide valuable information on where major health care needs exist in various populations and suggest targets for funding."

Copies of the Large Claims report are available for $35 from the Society's Books Department, 847/706-3526. An order form can be downloaded from the Society's Web site (
EDITOR'S NOTE: Journalists may obtain a copy of the study free of charge.

Society of Actuaries

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